Cable Industry Lies Through Its Teeth: Falsely Claims Greater Broadband Investment & Support For Net Neutrality

from the lying-liars dept

Tue, May 13th 2014 11:14am — Mike Masnick

So we already had the story about AT&T's FUD claiming that all sorts of horrible things would happen if the FCC went with Title II reclassification, and now Comcast and the other cable companies are ramping up the FUD efforts. They have a "friendly" Congress person, Rep. Gene Green, passing around a letter to his colleagues, which claims that:

In the years that broadband service has been subjected to relatively little regulation, investment and deployment have flourished and broadband competition has increased, all to the benefit of consumers and the American economy.

And it hints that such investment would somehow go away with reclassification. Of course, this is all a lie. In part, because Wall Street hates capital expenditure and gets angry any time broadband providers actually invest in broadband, these companies have actually been doing everything possible to decrease how much they spend on infrastructure investment over the past five years. Even worse, they're playing stupid statistical tricks to try to hide it. Thankfully, Matthew Yglesias, over at Vox.com calls them out on this. The big cable lobbying organization, NCTA, pulls two tricks with the following chart that it uses to falsely pretend that broadband investment is increasing:

First, the more obvious trick is that those numbers are cumulative -- which is what you generally do when you want to hide the actual rate of investment per year. But the rate is actually slowing down quite a bit. The second trick is more subtle. Note that there are three years between each of the first four numbers? But between the second to last one and the last one, there are four years. That's because the actual numbers would show pretty clear decline in investment, so they're fudging it by combining cumulative totals and then adding an extra year to that last number. Yglesias then used that data to calculate the actual averages showing a more accurate picture:

As you can see, it certainly suggests that, as they've grown more powerful, and as real competition has decreased, investment has been cut back significantly. That fits with plenty of other evidence concerning how the major cable and telco companies have acted. That story about "greater competition" is -- as we've discussed previously -- a complete joke. That's fudging statistics in a different way, lumping in totally non-competitive wireless accounts, which can't be used as broadband replacements.

Update: NCTA has responded to Yglesias's article, claiming that "the [original] chart had a few simple errors" which it claims to have now fixed. It also posted a new chart with yearly data, which still appear to show a decline from peak investment, though NCTA tries to spin at as continued growth in investment. It does appear that there are cycles, but investment has clearly declined. In fact, this new chart appears to confirm Yglesias' point, that capital expenditure hasn't grown massively as NCTA suggested (and that's because... it hasn't).

Oh, and Comcast's now even got the gall to argue that allowing it to merge with Time Warner Cable will mean more net neutrality protection and a "faster internet." It's putting those claims in big newspaper advertisements

Of course, they're being misleading. It's what they do. They're defining "net neutrality" very narrowly, based on the merger terms that were forced upon it when it bought NBC Universal. But that's got little to do with the actual net neutrality issues of today. As for a "faster internet" they mean, yeah, sure, if internet companies agree to pay extra (meaning you'll pay extra too).

I'm not exactly sure what the cable companies think they accomplish with these kinds of easily debunked claims, but it really makes them look excessively desperate.

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Filed Under: broadband, cable, fcc, investment, lies, net neutrality, tom wheeler
Companies: comcast, ncta, time warner

29 Comments

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Ninja (profile), 13 May 2014 @ 10:58am

If somebody has to hammer messages all over that something is good for everybody then it most certainly isn't. Unless, of course, there are facts involved.

If they both can't provide more reliable and secure connection by themselves what makes one think that a merger will make 2 wrongs a right?

Also, it's interesting how they talk about net neutrality while denying it 2 bullets below. There's no such a thing as internet essentials. What's essential is the ability access anything whenever you need. What's essential for them? Facebook?
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ChurchHatesTucker (profile), 13 May 2014 @ 11:18am

Oh, and Comcast's now even got the gall to argue that allowing it to merge with Time Warner Cable will mean more net neutrality protection and a "faster internet."
Comcast is under a Net Neutrality agreement with regulators, which they offered to extend to the merger. They probably see this as leveling the field.
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Michael, 13 May 2014 @ 11:21am

Does anyone have their profits for 1996-2013?

I wouldn't mind seeing their investment as a percentage of their profits as well.
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Anonymous Coward, 13 May 2014 @ 11:26am

Comcast and TWC need to be killed using Monopoly or even RICO laws. Their continual extortion of the American public, as well as private entities is beyond requiring action.
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Ninja (profile), 13 May 2014 @ 11:28am

Re:
I'm inclined to believe the investment in expanding the infra-structure has declined greatly while profits have increased.

I don't believe the data they make public for investors. Too many accounting tricks can be used to disguise the truth.
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Anonymous Coward, 13 May 2014 @ 11:38am

Re:
Honestly, they both had a sort of an unwritten deal to not compete in market areas. There's a pretty good map here: NY Times

The fact is that unless someone purchases TWC and actually decides to expand the footprint and offer customers an actual choice on services between them and Comcast, there's not much of a difference. Comcast's biggest gain will be that they will have more captive users (both meanings apply), and therefore even more bargaining power with companies like NetFlix, Google, Amazon, et al. It's a lose, lose for us poor slobs, unless a reputable company actually takes the purchase.
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Anonymous Coward, 13 May 2014 @ 11:50am

Almost everyone hates their cable company. Media campaigns based on lies can succeed when there's ignorance but not on something that directly affects the wallets of everyday consumers. People are not that stupid. At least I hope they aren't.
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Anonymous Coward, 13 May 2014 @ 12:08pm

what they can achieve is what they want and that is for those in congress that they manage to bamboozle with a few dollars and a helping of bullshit will start to tell everyone how good this is, knowing full well that all that will be achieved is greater power for those companies to do less, to give less but charge more, for longer. the only downside to customers, as always, is well, everything!
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That One Guy (profile), 13 May 2014 @ 12:09pm

Re:
In general no, for anyone even remotely familiar with the facts, almost none of them believe the lies the companies are throwing out.

However... politicians? 'Regulators'? They can be that stupid, either unintentionally, due to simply not knowing anything on the subject, or consulting with someone informed on it, or 'unintentionally', when they're trying to score some brownie points for their future jobs.
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Anonymous Coward, 13 May 2014 @ 12:11pm

Re: Re:
FTFY

I don't believe the data they make public for investors. Too many accounting tricks ARE used to disguise the truth.
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Anonymous Coward, 13 May 2014 @ 12:34pm

Re: Re:
surely you mean the politicians are PAID to be that stupid...
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limbodog (profile), 13 May 2014 @ 12:45pm

Rep Gene Green, ladies and gentlemen: https://twitter.com/RepGeneGreen

Griping about lousy politicians here is one thing, but at least on twitter you know one of his staffers will read it.
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cincinnatus, 13 May 2014 @ 12:58pm

I looked at their new numbers. They don't note anywhere whether their inflation corrected or not -- which usually means they aren't, particularly given they want to maximize the appearance of expenditure *now*.

I performed in inflation correction (CPI, 2014 dollars). An intriguing pattern emerges. They have a peak in capital expenditures in 1996 ($10 billion), 2001 ($21.6 billion), and 2007 ($16.7 billion). The number then drops and flatlines at $14 billion from 2009-2013. They say their investment cycle is 7 years, so we are apparently at a peak right now...

I posted the numbers here: http://pastebin.com/K9Z2epuq
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Anonymous Coward, 13 May 2014 @ 1:06pm

Re:
If they both can't provide more reliable and secure connection by themselves what makes one think that a merger will make 2 wrongs a right?

Because, by reducing competition, they'll be able to charge more for their service. Then, out of the evilness of their hearts, they'll spend that extra revenue on infrastructural improvements.
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Anonymous Coward, 13 May 2014 @ 1:59pm

Re: Re:
It wasn't an "unwritten deal." Until the Cable Act was reformed, it was the law. Congress and the states made the decision that the best way to deploy cable was to limit the number of providers to one and prohibited any other provider from building. The franchise authority was accompanied, not surprisingly, by considerable government delay and corruption. Because that's what happens when evolving industries are subjected to the well-meaning (or not) decision by regulators that they know best.
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Anonymous Coward, 13 May 2014 @ 2:33pm

Re: Re: Re:
I don't know about you, but local cable companies are far and few between around the Philadelphia area. Which act are you specifically referring to: Cable Communications Act of 1984, Cable Television Consumer Protection and Competition Act, or Telecommunications Act of 1996?
Most of these deal with content that is available on the TV networks, and not actual build-out of a new COAX system. The only thing I remember on the books was the Pole Attachment Act of 1978, in which the FCC can set the rates for using public utilities.

Till this day, local municipalities here can authorize or decline services from new providers depending on what benefits they receive, such that Verizon FiOS had to agree with my local township to wire ?80%? of the houses in order to offer service at my house. I can't remember the exact number, but it's in the public minutes somewhere.
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Anonymous Coward, 13 May 2014 @ 3:20pm

It's Thier Nature
I work for one of the big cable companies. They lie, cheat and steal from their own employees. What do you expect them to do to everyone else?
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Anonymous Coward, 13 May 2014 @ 3:27pm

Re: It's Thier Nature
their
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Sheogorath (profile), 13 May 2014 @ 7:50pm

Idiotic Congress Critter said: In the years that broadband service has been subjected to relatively little regulation, investment and deployment have flourished and broadband competition has increased, all to the benefit of consumers and the American economy.
Really? Because form what I've seen, Investment and deployment stinks compared to other developed nations, and has done throughout the years there was pretence at regulation. Ergo, what American companies need is more regulation, not less. Let's start with jail terms for embezzlement of government funds for the CEOs of companies that sit on funding meant for upgrading their networks to get them to modern standards, and those that advertise unlimited Internet access, only to cap it with 'Fair Usage' policies.
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Sheogorath (profile), 13 May 2014 @ 7:54pm

Re: Re:
AC, you're missing a sarc mark. You don't honestly believe that these companies are seriously willing to spend their shareholders' unearned profits on actually doing anything to improve the service, do you?
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Anonymous Coward, 13 May 2014 @ 9:11pm

Re:
"Idiotic Congress Critter said: In the years that broadband service has been subjected to relatively little regulation, investment and deployment have flourished..."

He was probably talking deployment of lobbyists and investment in political campaigns.
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nasch (profile), 13 May 2014 @ 9:41pm

Re: Re:
It's a lose, lose for us poor slobs, unless a reputable company actually takes the purchase.

Not to quibble, but it's not a lose-lose, it's a win-lose: a win for the cable companies and a loss for everyone else. A lose-lose would be if they lost and we lost.
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Pragmatic, 14 May 2014 @ 6:18am

Re: Re: Re:
*Cough*Libertarian*cough**hack**cough*kittensandrainbowswillfollowtheendofallgovernment*cough**cough *
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Anonymous Coward, 14 May 2014 @ 7:32am

Re: Re:
I do know they built out a 100Gbps backbone infrastructure. NANOG 59

But the key point that I think effects not only US citizens, but also the global trade in the US is that they are not "expanding the infra-structure". It's the idea that they don't have to compete with any competitors that is driving prices up, services down, and generally causing the issues. So the general consensus is that instead of competition, they will simply purchase the neighbor's network and expand through consolidation.
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Anonymous Coward, 14 May 2014 @ 9:28am

Re: Re: Re: Re:
*Cough*cablecompany*cough**hack**cough*kittensandrainbowswillendifcablecompaniesdontgetwhattheywant* cough**cough *

ftfy
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Mark Noo, 14 May 2014 @ 12:11pm

Duty of Candor
Does Congress have any duty of candor rules?

I hate lying statistics and I hat them even more when the numbers result in me being f***ed over.

Does anyone know if there is a duty of candor and what the penalties are if you get caught deceiving this nations lawmakers?
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OrganizedThoughtCrime (profile), 17 May 2014 @ 2:02am

Re: Re:
They can't reduce competition if there is no competition to begin with, which is why they already can charge more for their service. As to infrastructural improvements, I'll let the evidence speak for itself.
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OrganizedThoughtCrime (profile), 17 May 2014 @ 2:08am

Re: It's Thier Nature
If it's Comcast, I expect the very worst. I've never been victimized by them that way, but I have been in other ways.
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OrganizedThoughtCrime (profile), 17 May 2014 @ 2:10am

Re:
Well said. That statement by Rep. Green couldn't possibly be further from the truth.
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